Autoliv: Financial Report April - June 2025

Rhea-AI Summary

Autoliv (NYSE:ALV) reported record-breaking Q2 2025 results with net sales of $2,714 million, up 4.2% year-over-year. The company achieved 3.4% organic sales growth, outperforming the global Light Vehicle Production (LVP) increase of 2.7%.

Operating income surged 20% to $247 million, with an operating margin of 9.1%. Adjusted diluted EPS increased 27% to $2.16. The company maintained strong profitability despite U.S. tariff impacts, successfully recovering about 80% of tariff costs in Q2.

For full-year 2025, Autoliv raised its organic sales growth guidance to around 3% and maintained its adjusted operating margin outlook of 10-10.5%. The company also announced a new $2.5 billion share repurchase program through 2029 and increased its quarterly dividend by 21% to $0.85 per share.

Positive

• Record Q2 performance in sales, operating income, margin, and EPS
• Operating income increased 20% to $247 million
• Diluted EPS grew 27% to $2.16
• Successfully recovered 80% of tariff costs from customers
• New $2.5 billion share repurchase program announced through 2029
• Quarterly dividend increased by 21% to $0.85 per share
• Total headcount reduced by 5% while maintaining 3% organic sales growth
• Strong balance sheet with leverage ratio of 1.3x, below 1.5x target

Negative

• Operating cash flow decreased 18% year-over-year to $277 million
• Negative 2.5pp impact on sales from regional and customer LVP mix
• 35bps negative impact on operating margin from U.S. tariffs
• Underperformance in China market compared to LVP growth

STOCKHOLM, July 18, 2025 /PRNewswire/ --

Q2 2025: Q2 records for sales, operating income and margin as well as EPS

Financial highlights Q2 2025
$2,714 million net sales
4.2% net sales increase
3.4% organic sales growth*
9.1% operating margin
9.3% adjusted operating margin*
$2.16 diluted EPS, 27% increase
$2.21 adjusted diluted EPS*, 18% increase

Full year 2025 guidance
Around 3% organic sales growth
Around 0% FX effect on net sales
Around 10-10.5% adjusted operating margin
Around $1.2 billion operating cash flow

_{All change figures in this release compare to the same period of the previous year except when stated otherwise.}

Key business developments in the second quarter of 2025

• Net sales increased organically* by 3.4%, which was 0.7pp higher than the global LVP increase of 2.7% (S&P Global July 2025). Regional and customer LVP mix is estimated to have had about 2.5pp negative impact on sales, while tariff compensations added around 1pp to growth. We outperformed in Americas, Europe and Asia excl. China, mainly due to product launches and tariff compensations. In China, our growth gap vs. LVP was smaller compared to recent quarters, due to improved sales performance with Chinese OEMs. We expect that our record number of new launches will significantly improve our relative sales performance in China in the second half of 2025.
• Profitability improved significantly, mainly due to organic sales growth and successful execution of cost reductions. Total headcount decreased by 5%. We estimate that the negative impact from U.S. tariffs was around 35bps on operating margin, as we managed to pass on most of the tariff costs to our customers. Operating income increased by 20% to $247 million and adjusted operating income* increased by 14% to $251 million. Operating margin was 9.1% and adjusted operating margin* was 9.3%. ROCE was 23.8% and adjusted ROCE* was 24.1%.
• Operating cash flow was lower than last year, as Q2 2024 was boosted by positive, timing related working capital effects, while working capital changes in 2025 were more normal. This was partly offset by lower capex, net. The leverage ratio* of 1.3x is well below our target limit of 1.5x. In the quarter, a dividend of $0.70 per share was paid and 0.5 million shares were repurchased and retired.

_{*For non-U.S. GAAP measures see enclosed reconciliation tables.}

Key Figures

(Dollars in millions, except per share data)	Q2 2025	Q2 2024	Change	6M 2025	6M 2024	Change
Net sales	$2,714	$2,605	4.2 %	$5,292	$5,220	1.4 %
Operating income	247	206	20 %	502	400	25 %
Adjusted operating income1)	251	221	14 %	506	420	21 %
Operating margin	9.1 %	7.9 %	1.2pp	9.5 %	7.7 %	1.8pp
Adjusted operating margin1)	9.3 %	8.5 %	0.8pp	9.6 %	8.0 %	1.5pp
Earnings per share - diluted	2.16	1.71	27 %	4.31	3.23	34 %
Adjusted earnings per share - diluted1)	2.21	1.87	18 %	4.36	3.45	27 %
Operating cash flow	277	340	(18) %	355	462	(23) %
Return on capital employed2)	23.8 %	21.0 %	2.7pp	24.8 %	20.4 %	4.3pp
Adjusted return on capital employed1,2)	24.1 %	22.5 %	1.6pp	25.0 %	21.4 %	3.6pp
1) Excluding effects from capacity alignments and antitrust related matters. Non-U.S. GAAP measure, see reconciliation table. 2) Annualized operating income and income from equity method investments, relative to average capital employed.

Comments from Mikael Bratt, President & CEO

I am pleased to, in a turbulent market environment, report a record breaking second quarter for sales, operating income and margin as well as EPS. The performance was driven by good sales development coupled with successful actions to reduce costs and achieve tariff compensations. We outperformed in Americas, Europe and Asia excl. China and continued to outperform global LVP despite strong headwinds from LVP mix shifts, particularly in China. Based on a positive trend during the second quarter and a record number of new launches we continue to expect significantly improved sales vs. LVP in China in the second half year.

We remain focused on operational efficiency, commercial excellence and our cost reduction programs. Direct headcount was reduced by 6% while sales grew 3% organically, which together with continued repurchases of shares, contributed to a 27% increase in EPS. We remain confident that we can continue to successfully receive compensation from our customers for tariffs, although the industry outlook for tariffs is uncertain. We recovered around 80% of tariff costs in the second quarter, and we expect to recover most of what remains later in the year. We continue to closely monitor and evaluate the situation, focusing on being adaptive and agile.

At our Capital Markets Day in June, we reiterated our financial targets and communicated a new share repurchase program of up to $2.5 billion until the end of 2029 as well as announced a 21% dividend increase for the third quarter to $0.85 per share. Our increased shareholder return ambitions are supported by our strong balance sheet and cash conversion.

Our 2025 guidance for organic sales growth has increased to around 3% due to tariff compensations, and we reiterate our guidance of an adjusted operating margin of around 10-10.5%.

Next Report

Autoliv intends to publish the quarterly earnings report for the third quarter of 2025 on Friday, October 17, 2025.

Inquiries: Investors and Analysts 

Anders Trapp
Vice President Investor Relations
Tel +46 (0)8 5872 0671

Henrik Kaar
Director Investor Relations
Tel +46 (0)8 5872 0614

Inquiries: Media 

Gabriella Etemad
Senior Vice President Communications
Tel +46 (0)70 612 6424

Autoliv, Inc. is obliged to make this information public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the VP of Investor Relations set out above, at 12.00 CET on July 18, 2025.

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SOURCE Autoliv

FAQ

What were Autoliv's (ALV) key financial results for Q2 2025?

Autoliv reported net sales of $2,714 million (up 4.2%), operating income of $247 million (up 20%), and diluted EPS of $2.16 (up 27%) in Q2 2025.

What is Autoliv's (ALV) guidance for full-year 2025?

Autoliv expects around 3% organic sales growth, approximately 0% FX effect on net sales, adjusted operating margin of about 10-10.5%, and operating cash flow of around $1.2 billion.

How much is Autoliv's (ALV) new share repurchase program and dividend?

Autoliv announced a $2.5 billion share repurchase program through 2029 and increased its quarterly dividend by 21% to $0.85 per share.

How did Autoliv (ALV) perform in different regions during Q2 2025?

Autoliv outperformed in Americas, Europe, and Asia excluding China. In China, the company showed improved sales performance with Chinese OEMs but still faced challenges in overall market performance.

How is Autoliv (ALV) managing U.S. tariff impacts?

Autoliv successfully recovered 80% of tariff costs in Q2 2025, with tariffs impacting operating margin by about 35bps. The company expects to recover most remaining costs later in the year.